Rationalisation: reduce complexity and innovate!

Let's face it. Complexity is a fact of life in financial services. Mergers and acquisitions, organisational changes, and service offerings across multiple locations result in a maze of disparate and disconnected applications and platforms. In this environment, radical action is needed to lower maintenance costs, improve operational efficiency and improve customer satisfaction. Rationalisation today is mandatory to simplify and improve the way that financial institutions organise their daily business and deliver services to clients, writes Dominika Dorobisz

Let’s face it. Complexity is a fact of life in financial services. Mergers and acquisitions, organisational changes, and service offerings across multiple locations result in a maze of disparate and disconnected applications and platforms. In this environment, radical action is needed to lower maintenance costs, improve operational efficiency and improve customer satisfaction. Rationalisation today is mandatory to simplify and improve the way that financial institutions organise their daily business and deliver services to clients, writes Dominika Dorobisz

How do you achieve rationalisation and establish a solid base for innovation – to deadline and budget?

Rationalisation enables banks to get closer to customers and employees by simplifying products, processes and systems. But all too often, simple, user-friendly systems containing accurate and complete information remain a dream.

It doesn’t have to be this way. Banks can choose from different ways to rationalize. Here are some examples:

  • Product rationalisation: Retire out-dated products and go back to a few simple choices;
  • Mid-office rationalisation: Develop one way for customers to access services and products independent of the channel they use;
  • System rationalisation: Consolidate, upgrade or decommission legacy systems;
  • Process rationalisation: Standardize and optimize processes, for example, Lean. Why not re-use optimized processes across branches and countries?
  • Data rationalisation: Clean up data. Store customer, transaction and product data only once to avoid duplication and incorrect data, and
  • Shared services: Centralise systems and processes with the opportunity to optimize them once they have been centralised.

In practice, an actionable rationalisation plan often includes more than one method. The following criteria are important when selecting your approach:

  • Ease of use and maintenance by customer and employees
  • Organisational strategy
  • Needs of business and IT
  • Business priorities
  • Current-state environment
  • Availability of input data and resources
  • Costs of solving the problem
  • Disposable time for solving the problem
  • Potential benefits to be gained with the solution

In this era of drastic regulatory and compliance demands, which put strain on firms’ budgets and resources, system and process complexity will only escalate. Employees and customers are increasingly intolerant of out-of-date systems and products. Now is the time to dust off your business practices – front to back!